What Can You Learn From Annual Stockholder Reports?

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What Can You Learn From Annual Stockholder Reports?

The Securities and Exchange Commission (SEC) requires corporations with more than 500 employees and over $1 million in assets to publish an annual report within 90 days of the end of their fiscal year. If you are a shareholder, you will automatically receive a copy of the annual report in the mail.

Investors can find the following information in the annual report:

  • Net revenue
  • Earnings from operations
  • Net earnings
  • Net earnings per share
  • Return on assets
  • Return on equity
  • Shares outstanding
  • Dividend payments
  • Competitive industry position

Balance sheets

Annual reports also contain statements of the company’s current financial standing. These statements are called balance sheets. A balance sheet is a snapshot of a company’s accounts at a given point in time, usually the last day of the fiscal year. One side of the sheet lists what the company owns, called its assets. The other side lists what the company owes, called its liabilities, and its net worth, called owner’s equity. The assets of a balance sheet equal the company’s liabilities and owner’s equity.

Forms 10K and 8K

Two other forms included in the annual report are the Forms 10K and 8K. Form 10K provides investors with information on the corporation’s major customers, suppliers, and industry competitors. Form 8K lists any news of unusual events that may or will affect the company.